Decision makers often take risky decisions on the behalf of others rather than for themselves. Competing theoretical models predict both, higher as well as lower levels of risk aversion when taking risk for others, and the experimental evidence is mixed. In our within-subject design, money...

The disposition effect is a well-established phenomenon which describes the behavior of investors that are more willing to sell capital gains than capital losses. In this article we present experimental evidence on a situation where an investor decides on behalf of another person. In our...

The current study examines individual decision making in the fi eld of personal finance. How do people arrive at a financial decision? A laboratory experiment investigates the way external information is integrated into the decision making process. The objective is to explore the link between...

We study portfolio diversification in an experimental decision task, where asset returns depend on a draw from an ambiguous urn. Holding other information identical and controlling for the level of ambiguity, we find that labeling assets as being familiar or from the homeland of subjects...

This paper experimentally investigates how fair value measurements of financial instruments affect the decision of nonprofessional investors to invest in a bank’s shares. Specifically, we assess how investors respond to variations in net income resulting from fair value adjustments in trading...

Myopic loss aversion (MLA) has been established as one prominent explanation for the equity premium puzzle. In this paper we address two issues related to the effects of MLA on risky investment decisions. First, we assess the relative impact of feedback frequency and investment flexibility (via...

We study reputational herding in financial markets in a laboratory experiment. In the spirit of Dasgupta and Prat (2008), career concerns are introduced in a sequential asset market, where wages for investors are set by subjects in the role of employers. Employers can observe investment...

We investigate if, and why, an initial success can trigger a string of successes. Using random variations in success in a real‐effort laboratory experiment, we cleanly identify the causal effect of an early success in a competition. We confirm that an early success indeed leads to increased...

This paper aims to investigate market participants' reactions to sequential information, presenting firm-specific news and market-wide information. Experimental study takes place in the COVID-19 pandemic era, as market-wide information representation. We also provide firm-specific information in...

We use laboratory experiments to compare allocation rules in uniform price divisible good auctions. “Standard” and “uniform” allocation rules admit different types of low-price equilibria, which are eliminated by a “hybrid” rule. We observe little evidence of revenue differences...